BudgetMsg_Pres_05122015_FY_15_16
NEW HANOVER COUNTY
ALCOHOLIC BEVERAGE CONTROL BOARD
6009 Market Street
Wilmington, NC 28405
Telephone: 910-762-7611 FAX: 910-343-0491
Website: http://newhanover.abc.nc.gov
CEDRIC A. DICKERSON, Chair ROBERT W. MARTENIS, Vice Chair
AUGUSTUS C. EVERETT, JR., Member WILLIAM A. KOPP, JR., Member
THOMAS WOLFE, Member DANIEL W. SYKES, Chief Executive Officer
May 12, 2015
RE: Budget Message
Dear Members of the Board:
The Proposed Budget Document for the fiscal year July 1, 2015 through June 30, 2016 (FY15/16)
has been prepared in accordance with North Carolina General Statute 18B-
operations of local ABC and related information provided by the NC ABC Commission.
The ABC Board determines, through adoption of an annual budget, the level of customer service
that the ABC system will provide, the resources available for operations, and the resources
available for capital projects.
The primary drivers during the preparation of this budget included the need for revenues sufficient
to fund capital improvements as well as to provide equitable distributions to beneficiaries, and
projected operating costs required to sustain acceptable levels of customer service during the
budget year.
Revenues:
The budget consists of projected revenues from liquor sales, mixed beverage
$39million
surcharges, wine/mixer sales, interest income and miscellaneous receipts of about .
Although some sections of the economy appear to be improving, other sections appear to be
unstable, which creates a certain amount of uncertainty. Therefore, overall gross revenues were
% percent
projected to remain low with a proposed overall sales increase of about 4.
Disbursements
: On the disbursementsppropriations side, there are projected expenditures
$37 million
for Taxes, Cost-of-Sales, Operating expenses and Capital Outlays for about , plus local
$4.6 million
Alcohol Law Enforcement and tax/profit distributions of . Any excess disbursements
The current real estate project is to
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renovate the facility at 523 S. 17 Street, Wilmington, NC. This project should start in early July
2015 with projected completion of January 2016.
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: The budget process was started immediately after the 3 quarter
It was decided at the April 21, 2015 Board meeting to hold
financial statements were finalized.
the Public Hearing as part of the Board meeting which is scheduled for 8:30 AM today,
May 12, 2015 at the Wilmington, NC.
The
Proposed Budget Document is attached and will be released to the Board. Immediately after budget
presentation to the Board, notice will be made to both the media and the public that copies of the
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documents are available. Copies must be sent to both County Commissioners and the NC ABC
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This must occur by June 1.
Commissi The
June 16, 2015
Board will meet again on for further discussion regarding the budget. The Board
may approve the Budget Ordinance (Budget and Budget Message) at that time. The Budget must
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July 1.
be passed by
Highlights of the Budget
: Key elements include:
Conservative sales increases are projected because of the uncertainty of the economy.
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The 17 Street/Castle renovation should be nearing completion at calendar year-end.
There is a strong possibility that the Board will continue to seek new retail sales locations;
however, no geographic areas have been specifically identified at this time.
Employee pay increases will continue be based on merit (as a result of performance
reviews), promotions, and/or to adjustments-to-market conditions. Employee cost-of-
living pay increases were not included, as none are allowed by Board policy.
Alcohol law enforcement distributions were increased slightly to assist in controlling the
alcohol-related issues within the County.
Distributions to beneficiaries were budgeted as approximately 75% of net profits projected
to earn during the upcoming fiscal year.
Goal:
goal is to continuously enhance the level of customer service for both retail
customers and mixed beverage permit holders (LBD customers).
Fiscal Policy:
There are no major changes in fiscal policy.
Debt:
The Board does not have any debt at this time; however, debt may be incurred during the
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upcoming year depending on the outcome of the 17 Street renovation construction bids and
related cash flow.
Priorities and Assumptions:
A key
assumption is the amount of expected sales growth. Revenue projections are calculated
using expected sales growth combined with historic sales figures.
accounting; this is different than the Fund method of accounting used by most government
entities.
Depreciation and the cost of post-employment benefits are a part of s annual
financial statements; however, these expenses are not reflected in the modified-cash
budget. Projected cash outlays for Capital Expenditures are reflected in the budget.
The Board contracts primarily Department for
Local ABC law enforcement; it also continued its law enforcement contract with the City
of Wilmington Police Department for additional coverage.
Alcohol Education: Most ABC Boards in NC are required to contribute 7% of net profits
(after certain adjustments) for alcohol education and rehabilitation; the NHC ABC Board
is not subject to this law because there were applicable local acts in existence before the
7% law was enacted. In accordance with local acts, profits are distributed to the County
Government and local municipalities for use at their own discretion.
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As of March 31, 2015, per internal calculations:
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Minimum working capital was calculated at $1,099,300.
The total of Minimum working capital and Unrestricted Capital as of
03/31/2015 was $3.94 million.
No funds have been estricted for Capital Improvements as of 4/30/2015 pending
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receipt of the construction bids for the 17 Street project; it is anticipated that this
will take place near the end of May 2015.
In addition to providing for operating expenses and distributions, the Board must
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retain a sufficient level of working capital s
and expansion costs.
Staffing Summary
:
The Board has 45 full-time and about 20 part-time employees (there is minor seasonal fluctuation);
which equates to about 58 full-are distributed within
the departments as follows:
Store Employees 47
Purchasing and Logistics Employees 6
General and Finance Employees 5
Total 58
Conclusion
:
The Proposed Budget Document to fulfill its mission based on
known information.
Signed //Daniel W. Sykes//
Daniel W. Sykes
Chief Executive Officer
Attached: Proposed Budget Document for Fiscal Year 2015/2016
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